Pakistan seems to be looking at cryptocurrencies as a ‘magic pill’ to solve its perennial economic woes. Just when virtual currencies were beginning to become a serious alternative to established fiat money, Pakistan’s central bank banned its banks from processing cryptocurrency transactions.
Last week, the Pakistani government passed the Virtual Assets Act, 2025, formally paving the way for creating an autonomous watchdog, the Pakistan Virtual Asset Regulatory Authority (PVARA). This regulator aims to keep a tab on crypto transactions and identify terror financing in Pakistan.
Through the newly formed Pakistan Crypto Council (PCC), the government aims to promote and regulate cryptocurrency use.
In a country where blackouts are widespread, electricity prices are higher than rents and crucial energy imports are financed through credit, why would anyone spend on mining cryptocurrencies when their own people are yet to receive reliable power?
The government thinks that mining cryptocurrencies with the country’s surplus power would help open a new avenue of revenue generation for the impoverished country. But what the government doesn’t want to admit is how this remains a cover for the government to hide its own shortcomings, address electricity losses and underinvestment in developing transmission infrastructure.
“Some 15 to 20 million Pakistanis hold crypto today. The country possesses billions of US dollars in crypto transactions, so of course, we want to make this legal. We want to have a clear regulatory framework so we can bring in investments and we can let the ecosystem flourish in Pakistan,” Bilal Bin Saqib, the CEO of PCC said in a statement.
The IMF, which Pakistan turns to for multiple bailouts, is not impressed. In May, reports suggested that the IMF rejected the Pakistani government’s plan to allocate 2,000 MW for bitcoin mining and AI data centres, especially since the IMF is expecting the country to act on its reform agenda under its $7 billion bailout package. While both the IMF and the Pakistani government denied the reports, it shows how delicately Islamabad has to tread in its efforts to diversify its revenue.
Regulatory uncertainty remains unresolved in India
Back home, SEBI and RBI have yet to form a clear policy on regulating cryptocurrencies, though every crypto transaction attracts a 30% tax on gains and 1% tax on TDS. Despite several reminders from the Supreme Court, the RBI and SEBI have still not outlined a national framework to regulate cryptocurrencies.
One main cause of worry is the use of cryptocurrencies as an alternative currency to evade taxes and fund terrorist networks. Though there haven’t been cases of cryptocurrencies being used for terrorist activities in India yet, this remains a cause of concern for the authorities.
Even though India is taking its own sweet time here, an informed framework would work wonders rather than taking spontaneous decisions without oversight, something that Islamabad’s political elite have been accused of doing for years now.
Disclaimer: Cryptocurrency and NFTs are highly volatile and unregulated. Investing in these digital assets carries significant risks, and there may be limited legal recourse in case of losses. This article is for informational purposes only.
